This invention relates in general to the outsourcing of services. More specifically, the invention relates to the outsourcing of engineering services.
Outsourcing may be defined as the delegation of the operations and activities of an organization to external entities, which also involves the transfer of management control and decision-making to the external entities. These external entities may be subcontractors or suppliers who specialize in various operations. Examples of such operations and activities include customer support, health services, and engineering services.
Various engineering organizations are involved in New Product Introduction (NPI) and requisition activities. Requisition activities involve the execution of design modifications in existing designs. Engineering organizations outsource a significant part of their engineering activities to engineering service providers, who are also known as suppliers. These organizations streamline the total outsourcing process to maximize quality as well as optimize the number of suppliers and costs, to achieve maximum control, ownership and transparency.
Outsourcing also involves a study of the entire outsourcing pattern relating to the various sub-divisions of the engineering department in the organization. The study helps to classify and categorize all outsourced activities and suppliers. This classification is further utilized to quantitatively analyze and create an optimal mix of suppliers with respect to the activities being outsourced. Such an analysis requires an analysis model or method that can automatically evaluate the activities, as well as the suppliers, based on certain predetermined rule sets. The evaluation may also help to map the activities of the organization to the suppliers' quality, cost and competency. This evaluation process may also help to map the complexity and outsourceability of the activities.
Moreover, organizations require a method that can help to optimize the total number of suppliers for better control. The optimization of the total number of suppliers eliminates poor performing suppliers with minimal organizational impact. Additionally, organizations need to identify activities that require new suppliers because of the poor quality of the existing suppliers. This initiative may also form a part of an organizational strategy to tap global suppliers for cost benefits, while retaining the niche expertise of local suppliers.
Conventionally, there exists a method for determining the outsourceability of various activities in business processes that can be outsourced. This is determined by providing a score for business process activities. Thereafter, the activities are ranked, based on the scores. The high rank of an activity may signify its high outsourceability. However, conventional methods may not analyze each activity corresponding to each supplier. Therefore, it is difficult to rank and select a supplier, based on the activities or services provided by the plurality of suppliers. Moreover, such conventional methods may involve manual intervention during scoring and ranking of suppliers and activities.
Another existing method provides a cost-value analysis of the suppliers, for outsourcing. The method involves evaluating the suppliers, based on various evaluation criteria such as their technical and managerial skills and cost. Subsequently, a supplier is selected from the available suppliers. However, the cost-value analysis may vary with local conditions such as government rules, customer standards and environmental conditions. Moreover, the method may not analyze each activity corresponding to each supplier. Additionally, the method involves manual intervention for evaluating the suppliers.
In light of the foregoing discussion, there is a need for a method and system for analyzing the outsourcing of engineering services. The method should analyze each activity of each supplier. Moreover, the system should reduce manual intervention during analysis.